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Cablegate: Czech Republic: Hopeful On Dda but Expecting

VZCZCXRO4361
PP RUEHLZ
DE RUEHPG #1678 3381325
ZNR UUUUU ZZH
P 041325Z DEC 05
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC PRIORITY 6660
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS PRAGUE 001678

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EB/TPP, EUR/NCE, E STAFF DAN MORRISON
STATE PLEASE PASS USTR LISA ERRION
COMMERCE FOR ITA/MAC/EUR MIKE ROGERS
TREASURY FOR OASIA ANNE ALIKONIS

E.O. 12958: N/A
TAGS: EAGR ETRD WTRO EUN EZ
SUBJECT: CZECH REPUBLIC: HOPEFUL ON DDA BUT EXPECTING
LITTLE FROM WTO HONG KONG MINISTERIAL

REF: A. PRAGUE 1526

B. SECSTATE 211956
C. SECSTATE 209236

1. (SBU) SUMMARY: The 24 member Czech delegation to Hong
Kong, led by Minister of Industry and Trade Milan Urban, is
doubtful that progress can be achieved in Hong Kong and yet
remains hopeful about the Doha Development Agenda (DDA).
Both the Ministries of Industry and Trade and Foreign Affairs
believe that a more realistic window for substantial movement
on DDA is in 2006, as the EU negotiating position has
hardened in the last two months, leaving less room for
flexibility in Hong Kong. Although they explained that the
EU agriculture proposal remains their best and final offer,
the GOCR still hopes for progress on NAMA and services at
Hong Kong. END SUMMARY.

2. (SBU) Econoffs met with the Ministries of Industry and
Trade, Agriculture, Finance, and Foreign Affairs and
delivered a letter from the Ambassador to their Ministers,
stressing USG commitment to a successful Ministerial in Hong
Kong and conclusion of an ambitious DDA in 2006, and urging
EU movement on the agriculture proposal per reftel B. Both
Ministries of Industry and Trade and Agriculture made it
clear that there would be no progress on the EU agriculture
position at Hong Kong, despite the more progressive position
urged by the "northern tier" (Sweden, the Netherlands,
Denmark, Finland and the UK), which the GOCR fully supports
(reftel A). Instead, the GOCR is hoping there would be some
sort of a side agreement on NAMA and services along the lines
of the Swiss formula, although they did not elaborate how
that might be achieved without a breakthrough in agriculture.

3. (SBU) When asked whether and how the internal EU dynamic
has changed as a result of the pressures brought on by the
new U.S. agriculture proposal, our interlocutors indicated
that in the short run, the position of the agriculture
hardliners has become even harder and prevailed within the
EU. Nonetheless, the interests and positions of the small
non-agricultural countries have also become clearer and more
vocal, and the Czech Republic is cautiously hopeful that the
EU position on agriculture will evolve, even if not in time
for the Hong Kong ministerial.

4. (U) The GOCR is taking a rather large delegation to Hong
Kong. The 24 delegates represent four ministries: Industry
and Trade, Agriculture, Foreign Affairs, and Finance. The
final internal GOCR delegation meeting will be held December
5. The head of the GOCR delegation, Minister Urban of
Industry and Trade, will only stay for the first three days
of the Ministerial, at which point his Deputy Minister Martin
Tlapa, will take over.

5. (SBU) COMMENT: Compared to previous meetings with
Ministry of Industry and Trade (the lead ministry on WTO
issues), econoffs noticed three changes to the GOCR reaction
to the U.S. agriculture proposal: greater certainly that
there would be no further movement on the EU agriculture
proposal before Hong Kong, the mantra "DDA is not just about
agriculture," and attempts to downplay the impact of the U.S.
proposal. We see this as a clear result of continued
indoctrination from various EU meetings preaching that the EU
must be united on this issue. These changes are in contrast
to initial GOCR reaction to the U.S. agriculture proposal in
October, which was more open and hopeful that the U.S.
proposal can trigger change within the EU. As reported in
reftel A, the Czech Republic has much to gain from movement
at Hong Kong, especially in NAMA. However, they are resigned
to the fact that Hong Kong will likely not achieve sweeping
changes and instead, Czechs are hoping that 2006 will prove a
better year for reducing trade barriers. END COMMENT
CABANISS

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